Dennis Crowley was never meant to be a down-table Google engineer. Faced with the prospect of being one of the internet giant's forgotten would-be entrepreneurs, Crowley bounded out of its Mountain View HQ in May 2007. The man dubbed "the new king of social media" has never looked back.

For someone on the verge of disrupting major established industries, Crowley has an easy demeanour. He bounces across the room and answers questions in rapid-fire fashion. His all-American grin and oversized baseball cap make him look younger than 34. The low-hanging jeans and mid-length hair, he says, are a relic from a past life: "I used to snowboard 30 days a year. Now it's down to eight."

Crowley's lack of spare time is easily explained. The Boston-born inventor has spent the past three years vowing to make a success of the product Google bought – and quickly killed – in 2005. That product is Foursquare (then called Dodgeball), a mobile social networking game that encourages people to "check in" online to places they visit in the real world – bars, restaurants, Starbucks – in order to accrue points. More adventurous types, with lots of check-ins, win more points.

The more places you visit, the higher you rank on a league table made up of you and your friends. If you check in to one place often enough, you become its "mayor". Though it may sound like the epitome of avant-garde geekery, Foursquare now boasts more than 8 million users around the world – with more than half a billion check-ins in the past 12 months. Crowley finally has Google in his sights.

"It's the perfect storm of things coming together," he says. "We have just the right people at Foursquare, with just the right skill set, just the right number of users and just the right amount of data to make it happen. We feel like a young company – I can't believe how much we've accomplished in a year – but we're competing with Google with 20,000 employees, and Facebook with 3,000. I don't know how big we're going to get, but we're steadily getting bigger."

Despite writing after leaving that he was "incredibly frustrated" by Google's apparent lack of patience with his creation, Crowley says he feels no resentment towards the company. In fact, about a third of his 52 staff are ex-Googlers. "Google was fantastic because they have such a good process, so well-organised, with goals for every quarter. We've reproduced a lot of that at Foursquare. We've got Google engineers working with Google product people. It was a big accomplishment actually assembling our old lunch table," he says, only half joking.

Tough breaks

Foursquare launched in 2009 at South by Southwest, the annual gathering of future-thinking technology geeks, in Austin, Texas. Its unrivalled growth – the number of daily check-ins grew 3,400% last year, including one from the International Space Station – has brought new challenges.

"The more you build the company the more it breaks," he says, referring to the difficulty of achieving the right balance of product people and engineers. "When the company goes from two people to five people it's broken. When it goes from five people to 10 people it breaks. And from 10 to 15 people it breaks." Investors, including the renowned venture capital firms Andreessen Horowitz, Union Square and O'Reilly AlphaTech, have helped steady the ship. In July last year, Crowley and his co-founder Naveen Selvadurai took home just over $4.6m (£2.8m) each as part of a £12.4m funding round. The series B round left Foursquare with £9.6m to take on Facebook and Google – as well as the travel guide industry.

The deal valued the then 18-month-old company at about $100m, according to Andreessen Horowitz. Foursquare still generates a paltry amount of revenue, but has smart partnerships with the New York Times, Condé Nast and other companies looking to cash in on the local media boom. Dan Frommer, the founder of the influential Business Insider and Silicon Alley Insider tech news sites, speculated last month that Foursquare could field funding or acquisition offers of about $1bn.

If that sounds hopeful, then at least immediate competitors, such as Loopt, Brightkite, Whrrl and Gowalla – which launched at the same time and event as Foursquare – have fallen by the wayside.

Getting mobile

Although Crowley lists Google and Facebook as Foursquare's immediate competitors, it is not hard to see whose turf he is really encroaching on: age-old travel publishers. He envisages a future where tourists will explore cities through their mobile phones: "We want Foursquare to be a lot about encouraging adventure."

The mayorships, badges and point-scoring, he says, just add up to an "onboarding technique" to get people to come back. "All of that is in the background. The active part is actually going out and doing things." The argument sounds convincing. Why consult a dog-eared handbook meant for the general tourist if a realm of tailored recommendations is just three finger swipes away? Crowley tails off, imagining life as a game of Super Mario where adventures are rewarded, before recounting how, aged 11, he missed out on being one of the first 10 people in the US to beat the Nintendo game Legend of Zelda. He quickly backtracks: "But we don't want people to think of Foursquare as a game. We want people to think of it as a fun utility. Game dynamics are the bridge to get the people to use it from once a day to three times a day and then two weeks later."

This may sound like a prospect far in the future, but in Foursquare's New York offices it's already here. Staff can check in there automatically, using signals sent between the elevator and their mobile phones. The coffee machine, which can be digitally wired up to their phones, pours coffee once they've checked in.

Crowley's unashamed ambition is archetypal of New York's trendy East Village – where he launched Foursquare from his kitchen table – but it is also symptomatic of American entrepreneurship. What's significant is that in this era, where Google seems to dominate, startups such as Foursquare now emerging from the bowels of the search engine giant. Such is Crowley's optimism that he may well prove his former employers wrong.Watch Dennis Crowley's presentation at the Changing Media Summit

• This article was amended during 6-8 April 2011. The original contained a quote about treating your phone "like a passport" which was attributed to Dennis Crowley of Foursquare, the subject of this interview/profile. The quote has now been removed because it actually came from Josh Williams, co-founder of Gowalla. The error arose because both were interviewed at the Guardian in London around the same time about their similar companies, based on GPS tracking where users can check in to see if friends and shopping deals – among other things – are on offer in the area where they are at that point.